Bankruptcy is not a program which is easy to embrace, even if you are facing severe debt and financial issues. However, dire financial situation is ultimately forcing most of the Americans to opt for bankruptcy. Furthermore, after extensive research it was found that it has almost become a trend for the middle class Americans to file bankruptcy. However, the middle class Americans have always been the face of America and its strength. So, with more number of middle class families filing for bankruptcy, America’s growth is at stake.
Middle class family and the bankruptcy issue
This problem is not a new one. Middle class families filing for bankruptcy is one of those phenomenons which started with the downturn in 2008. For example, in case of Staci Schubert, she had been successful enough as a graphic designer and even as a sales executive. She then launched her own business in 2003 which failed badly during the meltdown. She had used most part of her savings to start the business and so when it failed, it became almost impossible for her to manage the finances. Therefore, she filed Chapter 7 bankruptcy. This is quite a common phenomenon which has been happening with most of the successful middle class people.
Irrespective of who you are and where you are and the situation in which you are in, it becomes hard to live a life as a bankrupt. The main problem with the middle class has been that they have been able to make money throughout and thus has been able to afford what they have been spending on. So, when financial emergency snooped down upon them, most failed to stay steady. Therefore, it is extremely important to know how you can avoid racking up debts and also consider what kind of situation can lead to bankruptcy as described in a book by Elizabeth Warren, who is a Harvard law professor and bankruptcy expert – the book being “The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke.”
The middle class crunch have grown with time, may it be during the recession or even after that. As per a study, middle class married couples who have children are more prone to filing bankruptcy as compared to the unmarried people. In fact, bankruptcy although dreaded has almost become a part of the American life. The major number of middle class consumers filing bankruptcy outnumbered the previous ones during the economic meltdown. However, this did not cease as the economic condition started to improve with time. Even now the middle class Americans are still filing for bankruptcy and what is more important is that these are not the young people but the married couples, and not even the divorced men or women.
Bankruptcy is that state when you declare your disability of managing your finances, as the bill payments to be made is more than what the total income is. Many file for bankruptcy, just to evade debt payments and some do to save their home. However, what you need to do before filing bankruptcy is find out if bankruptcy would at all prove to be helpful enough for you to solve the debt issues. You will have to determine if you actually will be able to save your home from foreclosure, if you file bankruptcy. You will also be required to find out if it would be possible for you to keep up with the home loan payments, even after the bankruptcy discharge. Furthermore, savings will have to be improved and expenses lowered. These are the only options through the middle class distress can be solved.